Contributions - Revenue Recognition and Related Matters – AcSB

Date recorded:

At its meeting on June 22-23, 2022, the AcSB discussed exposure draft proposals relating to endowments; contributed materials and services; pledges; and bequests and reached the following preliminary views:(i) Permanent endowment contributions should be recognized as direct increases in net assets in the period in which the organization is entitled to the contribution as they represent resources that the organization will never be able to access or use for their own benefit. (ii) Organizations should continue to have the option to recognize contributed materials and services when specific criteria are met. (iii) Pledges and bequests should not be recognized until the contributed assets are received since an organization cannot control access to the benefit of these contributions until that point. These preliminary views are subject to discussion with the Not-for-Profit Advisory Committee and further consideration by the AcSB as other aspects of an exposure draft are developed. The AcSB also discussed fund accounting, presentation of net assets, and disclosure of restricted cash. The Board considered how presentation and disclosure requirements can complement the proposed approach for accounting for contributions and improve the relevance of financial statements prepared in accordance with Part III of the CPA Canada Handbook – Accounting. The Not-for-Profit Advisory Committee will discuss and provide input on these proposals at its July 2022 meeting. The AcSB will continue discussing exposure draft proposals at its July 2022 meeting. The Board plans to issue an exposure draft in the first quarter of 2023.

Review the Executive Summary on the AcSB's Web site.

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